Simplification of the 1st and 11th Directive

Simplification of the 1st and 11th Directive

• Proposal for a Directive of the European Parliament and of the Council amending Council Directives 68/151/EEC and 89/666/EEC as regards publication and translation obligations of certain types of companies

• 17.4.2008 submitted by EC• negotiations started during SI PRES • CZ PRES took over the negotiations from FR on

1st January 2009

Why?

• company law directives – adopted between 1960s and 1980s

• 1st CLD – adopted in 1968• progress in information technologies• duplication of information provided by companies

Type of action

• part of the Action programme for the reduction of the administrative burden – number of proposals submitted as a „fast track“

• company law, accounting and auditing – priority areas in admin. burden initiative

• in parallel Commission launched initiative for simplification of the regulatory environment for European businesses (within the general context of Better Regulation)

Content – 1st CLD

• original version – target: publication requirements for limited liability companies (Art. 3)

- commercial registers, national gazettes + - national/regional newspapers (outside the scope of the directive)• amendment 2003 – adaptation to new

technologies – since January 2007 possibility to file documents and particulars by electronic means + national gazette can be kept in electronic form/equally effective means

• publication costs: - incorporation of the company

- change to documents/particulars (e.g. annual accounts)

- publication requirements included also in other directives/regulations (references used to the disclosure rules in 1st CLD); e.g. SE, SCE, 3rd CLD on mergers, 6th CLD on divisions, 10th CLD on cross-border mergers …

New proposal

• aim: reduce redundant publication requirements = reduce admin. and financial costs for companies

• content: obligatory central electronic platform (information disclosed in chronological order, e.g. registers´website or electronic national gazette) + no special fee for companies as regards publication via CEP or any additional publication obligation imposed by MS

• justification: electronic availability = no need for the publication in national gazettes (paper based); national gazettes often contain a reference and not the full information

• MS free to continue to provide for additional publication obligations – free of charge for companies

• registration fees are kept (recital 6)

Impact Assesment

• the total minimum costs of current rule to publish in national gazettes – estimated at:

1) around 410 mil. EUR/year (as regards publication of annual accounts)

2) around 200 mil. EUR/year (as regards publication of changes in the registers)

3) internal costs of companies for preparation of the information to be published

4) in some MS – costs for publication in newspapers (no figures available)

Challenges

• traditions• internet penetration • earnings

11th CLD

• the proposal contains modification of 11th CLD on branches

• objective: reduce costs for translation and certification

• proposed measures: mutual recognition of translations of certain documents of a branch (e.g. memorandum, articles of association, accounting documents)

Thank you for your attention!

Martina Nemcova

Attaché for Company Law

Permanent Representation of the Czech Republic

[email protected]

Tel. 0032 (0) 221 39 324